Marketers: Keep It Simple!

I have edited and reformatted a recent case study from the Harvard Business Review that researches and analyzes consumer behavior and tests the premise that consumers today have abandoned brand loyalty in favor of the lowest price and the best deal.  This is part of an excellent series in the latest HBR issue, available online.

“To Keep Your Customers, Keep It Simple” - Harvard Business Review

      by Patrick Spenner and Karen Freeman  May 2012

http://ow.ly/b1QNY

Many marketers see today’s consumers as web-savvy, mobile-enabled data sifters who pounce on whichever brand or store offers the best deal. Brand loyalty, the thinking goes, is vanishing. In response, companies have ramped up their messaging, expecting that the more interaction and information they provide, the better the chances of holding on to these increasingly distracted and disloyal customers. But for many consumers, the rising volume of marketing messages isn’t empowering—it’s overwhelming. Rather than pulling customers into the fold, marketers are pushing them away with relentless and ill-conceived efforts to engage.

Research Methodology:  Over a three-month period, Corporate Executive Board conducted pre- and postpurchase surveys of more than 7,000 consumers in the U.S., the UK, and Australia, covering a wide range of ages, income levels, and ethnicities.

Respondents were asked dozens of questions about their attitudes and purchase experiences across a variety of price points and channels in categories including apparel, cars, luxury goods, onetime purchase items (such as airline tickets), and ongoing services (such as cell phones).

Questions explored shopping duration, effort required, purchase-related research, the consumer’s state of mind, his relationship with the brand, the frequency of his interactions with the brand, and the likelihood of repurchasing and recommending.

In addition, 200 CMOs, brand managers, and other marketing executives representing 125 consumer brands in 12 industries globally were interviewed. They were asked about their strategies and beliefs concerning the factors that lead to “stickiness”.

The study focused in on what makes consumers “sticky”.  This is defined as consumers who:

·       Are likely to follow through on an intended purchase

·       Buy the product repeatedly

·       Recommend the product to others

The impact on stickiness was evaluated on more than 40 variables, including price, customers’ perceptions of a brand, and how often consumers interacted with the brand. The single biggest driver of stickiness, by far, was “decision simplicity”— the ease with which consumers can gather trustworthy information about a product and confidently and efficiently weigh their purchase options.

What consumers want from marketers is, simply, simplicity.

Here’s a snapshot (no pun intended!) of two competing digital camera companies and their marketing strategies.  Which one do you think is the most successful?

Brand A: It uses search engine optimization to find consumers who are searching the web using common digital camera terms.  They are then directed to the company website. There they find extensive product information sortable by model, technical specifications, and 360-degree rotatable product photos.

In stores, shelf labels list the key technical attributes of each model, such as megapixel rating and memory, and provide a QR code that takes consumers to a mobile version of the brand’s website, where they can dig more deeply into product specifications.

Brand B: Its search engine strategy is to first understand the consumer’s intent and where in the search process he/she is likely to be.

• Why does he/she want a camera?
• What will it be used for?
• Is he/she just starting to look, or is she ready to buy?

Based on SEO criteria, the company guides those in the early stages of investigation to third-party review sites (where its cameras get good marks).

Consumers who indicate they are actively shopping are directed to the brand’s own website. User reviews and ratings are front and center there, and a navigation tool lets consumers quickly find reviews that are relevant to their intended use of the camera (family and vacation photography, nature photography, sports photography, and so on).

In stores, Brand B frames technical features in nontechnical terms. Instead of emphasizing megapixels and memory, for example, it says how many high-resolution photos fit on its memory card. The QR code on shelf displays leads to a simple app that simulates one of the camera’s key differentiators, a photo-editing feature.

The Winning Strategy:  The research showed that customers considering both brands are likely to be dramatically more “sticky” toward Brand B.  Again, “sticky” consumers

·       Are likely to follow through on an intended purchase

·       Buy the product repeatedly

·       Recommend the product to others

The highly detailed information Brand A provides at every step on the purchase path may instruct the consumer about a given camera’s capabilities, but it does little to facilitate an easy decision. Brand B simplifies decision making by offering trustworthy information tailored to the consumer’s individual needs, thus helping traverse the purchase path quickly and confidently.

Making Decisions Simple

For a marketing organization, what does it take to acquire sticky consumers?

The study found that the best tool for measuring consumer-engagement efforts is the “Decision Simplicity Index,” a gauge of

·       How easy it is for consumers to gather and understand (or navigate) information about a product

·       How much they can trust the information they find

·       How readily they can weigh their options

The easier a brand makes the purchase-decision journey, the higher its decision-simplicity score.

Brands that scored in the top quarter in the study were 86% more likely than those in the bottom quarter to be purchased by the consumers considering them. They were 9% more likely to be repurchased and 115% more likely to be recommended to others.

Shifting the orientation toward decision simplicity and helping consumers confidently complete the purchase journey is a profound change, one that typically requires marketers to rethink how they craft their communications. Some practical lessons can be drawn from brands that are leading the way.

To obtain ever more attention from overloaded consumers, brands ultimately lead them down unnecessarily confusing purchase paths. Creating a more efficient path means minimizing the number of information sources consumers must touch while moving confidently toward a purchase. The savviest brands achieve this by personalizing the route.

This approach is especially foreign to marketers because in many cases the simplest, most confidence-inspiring learning path involves touchpoints that are outside a brand’s direct control. Often what a consumer needs is not a flashy interactive experience on a branded microsite but a detailed exchange with users about the pros and cons of the product and how it would fit into the consumer’s life.

The moral to today’s story:  Keep it simple!!!